monkeydelarge: DRM like Steam also started existing to kill off the second hand market for video games. These publishers didn't like it when people saved money by buying used games. They think it was eating up some of their profit.
The used-games market serves as a means of
risk reduction: if you end up not liking the game you have bought or it doesn't work well on your system you can hopefully sell it off and reduce your losses. You could also opt to trade your undesired game for another one or get some kind of voucher. The end result is the same though: you have mitigated a decent part of the risk you have initially taken.
With Steam games you can't reduce your risk apart from buying the game much cheaper through Steam Brazil or similar, or unless you wait until the game is on sale. Of-course buying
any kind of digital game means that you are more or less stuck with the product afterwards, unless there's some serious technical issue with the game.
For me the 'loss of profit argument' becomes silly when you realize that
any kind of producer could use the exact same argument in favor of
their particular product: cars, clothes, DVDs, music albums, computers, books, furniture, music instruments and so on.